From: Pogemiller, Clint [mailto:Clint.Pogemiller@modern-woodmen.org] 

Sent: Monday, July 20, 2015 6:19 PM

To: EBSA, E-ORI - EBSA

Subject: RIN-1210-AB32

July 20, 2015

Office of Regulations and Interpretations

Employee Benefits Security Administration

Attention: Conflicts of Interest Rule

Room N-5655

Office of Exemption Determinations

Employee Benefits Security Administration

Attention: D-11712 and D-11713

United States Department of Labor

200 Constitution Avenue, N.W.

Washington, D.C. 20210

RE: Proposed Conflict of Interest Rule and Related Proposals, RIN-1210-AB32

Dear Sir or Madam,

As President and representative of MWA Financial Services Inc., a broker dealer wholly owned by 

Modern Woodmen of America, a leading fraternal financial services organization, our mission is to 

improve the lives of our clients. As such, I greatly support the Department of Labor's (Department) goal 

of investor protection in the retirement savings marketplace. Unfortunately, the Department's proposed 

'conflict of interest' rule (Proposal) attempts to achieve this goal in the wrong manner. If the Proposal is 

not substantively changed, it will end up hurting our clients and our business. Therefore, we appreciate 

this opportunity to submit comments to the Department and hope that they are helpful in crafting a 

regulation that achieves the goals of investor protection without hurting investors of modest means or 

businesses that provide these investors with high-quality retirement services. 

The Proposal includes a variety of provisions that will make it harder for clients and other retirees to 

obtain access to the advice that they so desperately need to secure a dignified retirement. Specifically, 

we have the following concerns:

1) Financial Advisors are Heavily Regulated: The Proposal appears to be motivated by a mistaken belief 

that financial advisors and the financial industry are inadequately regulated. In truth, our business is 

heavily regulated by multiple regulators, and our broker-dealer routinely monitors activity and examines 

our business to ensure compliance with the numerous rules and regulations we are subject to. We are 

required to follow the rules of the Securities and Exchange Commission, the Financial Industry 

Regulatory Authority, state securities regulators, and may be subject to an examination or inspection by 

these agencies at any time. These regulators, in addition to creating and enforcing rules, are also at the 

front line working to detect illegal activity in the retirement market and coordinate with law 

enforcement to rid the industry of bad actors. This proposal, while intended to bolster the existing 

regulatory framework, will in fact create a more fractured and confusing environment that will 
unnecessarily strain the resources of securities regulators and our broker-dealer's compliance 

department who are best positioned to detect and remedy regulatory concerns.

2) BICE is Unworkable: While the spirit of the proposed Best Interest Contract Exemption (BICE) may be 

sound, as currently crafted it is largely unworkable for a variety of reasons. The proposed BICE requires 

our firm to adhere to numerous very detailed, costly, and difficult requirements while producing an 

unprecedented amount of very specific data on a point of sale, annual, and continuing basis. It will also 

subject us to huge liability exposure. The Proposal also requires financial services firms to significantly 

alter the compensation structure of our industry. The result is that we will not be able to continue to 

advise small and mid-size clients who need retirement assistance. Without guidance, we fear that these 

individuals' retirement security will be placed at risk. This is unacceptable in light of the retirement crisis 

facing our country. In addition to these concerns, we also want to raise the following issues with the 

proposed BICE:

- The requirement that a customer sign the contract 'pre-engagement' will create an unnecessary 

hurdle to clients sitting down with a financial advisor and seeking to understand how to prepare for 

their retirement. Although the intended purpose of BICE is to enhance their rights and protections, 

clients seeking advice will be reluctant to sign a contract prior to getting to know whether to work with 

their advisor. Any such contract should be provided and signed at the point of sale.

- Creates Private Right of Action: We are also concerned with the proposed private right of action that 

would be created under the contract stipulated by BICE. This right was never authorized under ERISA or 

any other related statute. Furthermore, significant federal and state remedies are already available to 

consumers who allege harm by broker-dealers and their advisors.

- Removes Important Investments from an Advisors Tool Box: We also believe that the Department's 

decision to ban certain products from the provisions of BICE would in fact prevent advisors from serving 

the best interest of some clients. While concerns regarding price transparency and revenue flows may 

be driving this decision, financial advisors know that not every investor has the same needs and 

circumstances, and being able to provide a wide array of products allows advisors to serve different 

types of clients.

3) Disclosure Approach is Preferable to BICE: The Department appears to have discounted the fact that 

improved disclosures would address many of the concerns that have led to the Proposal. In order to 

provide investors with the information that they need, investors should receive concise consolidated 

disclosure documents written in plain English. These improved disclosures would ensure that consumers 

are better informed without the deep disruptions to the current retirement savings marketplace that 

would cause many retirement savers to lose access to invaluable financial advice.

4) Education Carve-Out Changes Will Hurt Retirees: The Proposal's changes to what is considered 

'investment education' will likely curtail the effectiveness of investor education outreach. The inclusion 

of decumulation in 'investment education' is commendable, but the prohibition on using specific 

investments to demonstrate the options available for investors to create an appropriate asset allocation 

will lead to investors having less knowledge regarding their investment options.

5) Grandfathering Provision is Ineffective: Another concern is the Proposal's 'grandfathering provision,' 

which will require that virtually every single account be repapered, or that financial advisors not provide 

further service on their client's existing retirement accounts. This type of regulation does not serve the 
best interests of investors. Therefore, it needs to be replaced with a more conventional grandfathering 

clause that is tied to the date of purchase, irrespective of continuance of service on the account.

6) The Proposal would only apply to retirement savings products: This would leave advisors working 

under a variety of standards depending upon our registration status (investment advisor or brokerdealer) and the account type (retirement or non-retirement). I believe this will lead to confusion 

amongst the clients we serve. It is because of this that it is critical that any standard of care be proposed 

in close coordinate with the securities regulators.

We urge the Department to work with the industry to develop a workable best interest standard that 

protects investors and preserves their access to much needed retirement assistance, products and 

services.

Sincerely,

Clint Pogemiller

President

MWA Financial Services Inc.

1701 1st Avenue

Rock Island IL 61201

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